Value Proposition: It can kill your project if you let it.

value propositionFee for service contracts drive you to do as little as possible.

It doesn’t matter what type of consulting contract you have.

In essence, there are three basic types of fee for service contracts; a fixed fee, a percentage of construction or an hourly rate. Clearly, the fixed fee wins. It’s the best way for a design consultant to ensure they have control over how they allocate and expend the fee. Yet, no matter the fee structure, consulting work suffers from the paradigm that makes any consultant want to put as much effort into doing as little as possible.

It’s a defense mechanism that most design consultants eventually succumb to.

Why?

The more effort put into a fee for service contract the more it dilutes the value of the work.

If you have ever worked in a consultancy you will understand this basic principle. In fact, it is inherent in the culture of most consulting firms. Logically, there is no other way to operate in order to feed the machine’s many moving parts. Consider all the factors such as rent, salaries, equipment, marketing, supplies, accounting and human resources and how they can drive the culture of consulting work. Doing things better usually acquiesces to doing things faster. Doing things faster gives the perception of cost savings and as a result is the perceived catalyst for growth.

Many design consultancies don’t start out that way yet most end up that way.

 

Effort is heavily influenced by time.

One of the most important drivers of project work is the deadline therefore, as consultants, we are conditioned to focus on deadlines and often not much else. The deadline, in itself, has been the “constraint du jour” for as long as consulting has existed and we abide by its almighty rule without thinking about it much at all.

What’s that pressure we feel as we approach the line?

It feels like a point of no return. Dead. Line. Yet, there has to be a line in the sand otherwise we would never get anything done. We are slaves to the line. We’re taught to respect the line. We’re taught how the line is the single most important constraint (right or wrong) of a project.

The deadline drives the consultant to work very hard at doing just enough to meet the constraints of the project.

 

The deadline forces our hand in another way.

Earned value is the other significant factor that drives the outcome of most projects. The amount of work a consultant can do is heavily influenced by the deadline and the amount of work the consultant does defines the project’s value at any given point in time. The value proposition, in this case, is derived by subtracting the operating cost from the financial commitment a client is willing to make for the consultant to meet their list of constraints (time, budget, scope).

In simple math; time = money.

The less time the consultant spends the more money they make. Or so they think. This is the essence of fees for service contracts. No pie-in-the-sky altruism. Simple, basic, reality.

With that in mind ask yourself these questions:

  • What’s valuable to your client in comparison to what’s valuable to you?
  • Is your client getting the best service from you based on how you value the work?
  • Is value perceived equally across your firm and its projects?

These questions are meant to challenge a consultant’s thinking about why they might take on a project and if they do how they might derive value from it.

 

The perception of value influences how you approach a project.

So, what happens when your value proposition is disproportionate to the constraints? What happens when your client doesn’t understand value the same way you do? Well, as consultants, we look for ways to bend the constraints to our advantage, don’t we?

Usually as much as possible.

I am, by no means, doing my work simply because I love it. I do, in fact, love the world of architecture and design but I also love my yearly holidays, my weekends with family and friends and my creature comforts.

In this environment I have a choice.

I have to decide how to work most efficiently within the constraints set by the projects I take on or I have to accept life will become much different than it currently is. On the surface, it appears as if I have to bow down to the constraints and reconcile the value as best as I can to make my projects work.

It seems like I am forced to work as hard as I can to work as little as possible.

 

It looks like I am the one that’s stuck.

I have read some articles written by entrepreneurs and small business owners describing how they have developed the freedom to define the value proposition of their work in a way that suits their needs best. Some seem to have developed the freedom to see what sticks, pick and choose projects and try things without the barriers most of us face. I applaud every one of them for their effort. I have a deep respect for their stick-to-it-ness, their free flow of ideas and the vast land of opportunity they perceive.

Do these people simply see value in a different light?

Sure, creature comforts are subjective and there is certainly more satisfaction in life than solely chasing them. But how do these people make it work? Please don’t tell me they have less overhead so they can devote more time to explore opportunity. We all know they do but they also have to work twice as hard as those that are employed in a more corporate setting. As individuals, they have to do much more to get to the same place. They normally don’t have the luxury of relying on all the administrative functions that come with corporate life.

So, what’s the difference?

The question really comes down to how they perceive value.

Regardless of whether we are in business for ourselves, we are part of a small consultancy or are part of a large corporate entity we all work with constraints. They’re a constant. It’s how we place value within the constraints to get the project complete that makes the difference.

That’s where the opportunity lies.

 

Here’s one way to generate a value proposition within a project.

I recently listened to Seth Godin, the entrepreneur’s golden boy, speak about using project constraints as a catalyst for creativity. He explained this concept in a conversation with Srinivas Rao for a feature he called flying closer to the sun (originally published in 2013).

We get a peek into Seth’s life as a young man and hear a bit about his upbringing which starts to paint a very clear picture that he was, from a very early age, wired to be entrepreneurial. He went on to speak about his venture The Domino Project and brought up a very interesting point of view about the difference between a project and a job. I won’t go into the details (you can listen here – go to the 38:00 min mark if you don’t have time for the whole conversation). His perception between the two, as it relates to productivity, is amazing.

As part of his project, he hired some young folks, paid them a salary and then found they were vastly underperforming. What he realized was that once he gave them a job and paid them a salary they did as little as possible to get the job done. They saw the value of their salary as directly proportional to the amount of effort they put in. So, he fired everyone and told them not to come back unless they wanted to view the project as an opportunity to make a difference and not just as a job. Gutsy move.

What do you think happened?

Seth Godin eliminated the idea around placing value on the amount of work being done and redirected the value to achieving great results. He convinced his paid employees, like many of us, to see the value of the effort required to complete the project in a different way.

 

We can redefine the value proposition in our work.

There isn’t any reason why we can’t take the opportunity to change the way we approach our project work and still find success within the constraints of our projects.

Our work is less limited by effort if we consider exerting the right effort at the right time and for the right amount of time. Taking pride and doing meaningful work, even in the simplest of tasks, changes the outcome normally for the better. Taking the opportunity to make a difference changes how value is perceived. The more we look for those opportunities the more it becomes the way we do things.

Having the ability to look for opportunities to improve an outcome makes people feel like they are valued.

Being valued makes people happy.

  • Happy people recognize improvement opportunities sooner and more readily seek them out.
  • Happy people are more focussed.
  • Happy people are more diligent.
  • Happy people care about what they do. They will go the extra mile.

A project will never be free of constraints (time, budget, scope) but when you redefine the value of the work necessary to meet the constraints amazing things can happen.

 

Reinventing the value proposition through process improvement.

Here’s a few ways you can reinforce value in the context of project delivery to help things get done for the right reasons, at the right time and for the right amount of time.

1. Communicate clearly.

Timely communication is almost as important as clear communication.

Whatever your choice of delivery (face to face, email, phone) be clear, concise, include the right people and make sure you respond to questions with appropriate urgency to ensure your team members feel like they have been heard and their concerns are understood.

2. Provide feedback often.

Nothing beats timely feedback on progress. Deciding when and how to provide feedback is as important as the content itself.

In the moment, providing constructive, tangible and to the point feedback will ensure the recipient is clear on the direction they need to take. The best approach for me is to ask how the recipient would solve the issue themselves. Guide instead of direct.

Checking in and reviewing progress weekly on an individual basis is ideal for project status updates. In order to make the most of a regular feedback loop try to use a simple agenda that suits the goals of each team member. The agenda ensures the conversation is targeted and stays on point.

3. Listen actively.

This is one of the hardest skills to acquire but when you are able to listen actively everyone involved can come to consensus much quicker.

No phones, face to face and clear focus are helpful to get to the place where you can really listen well. There are tons of tips and tricks out there to help improve listening skills but the thing for me is simply putting the phone away, never interrupting and repeating back the key elements of what I heard. I find both people walk away with a clear understanding of the transaction.

4. Share responsibility equally.

If you can make this happen, it is an awesome productivity hack.

If a team is given the autonomy to achieve the results in their own way, understand they share responsibility equally between them and know they can support each other to achieve the results they need then the guesswork (whose job is that?) that slows people down is reduced immensely. Set the ground rules early and reinforce them as you progress forward (see 2 above).

5. Share your lessons learned.

How often have the same errors repeated themselves on projects or by project teams?

Probably more than we would want to admit.

If someone discovers a solution to a problem having a process to share it openly and objectively with a team is essential. This requires all of the above to be in place; clear objective communication, productive feedback, active listening and especially the clarity that the team is equal in sharing the successes and failures. Without any of these in place sharing lessons learned becomes an empty pursuit.

We want our teams to look for ways to improve their processes and to feel confident that sharing improvements, however small, will be valued by the team without judgement.

 

These tips are easy ways to make a difference. They don’t require additional effort from a project team and in turn actively provide opportunities to save valuable resources that can be put toward achieving great results.

Pretty soon you will forget that you are trying to do as little as possible because you are having way too much fun doing what is right, at the right time and for the right amount of time.

 

If you have any questions or want some further insights into our process improvement ideas you can get in touch with me via email here, call me at  416-500-0374 or you can ask your questions below.

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